91 Days of Ramsey

It has now been three months since we began living according to a budget, and we are astounded with God’s kindness and graciousness to us. In that time, thanks to God’s faithful provision to us, we have been able to retire almost half of our debt (not counting the mortgage on our home). What seemed (just three months ago) to be an insurmountable and crippling debt, now appears to be a manageable amount we could potentially pay off in less than a year. I am reminded of Paul’s prayer benediction in Ephesians 3:20-21:

Almost Halfway!
We’re down to 51%!

Now to him who is able to do immeasurably more than all we ask or imagine, according to his power that is at work within us, to him be glory in the church and in Christ Jesus throughout all generations, for ever and ever! Amen.

We have never been grossly foolish with our money, as far as I can remember. We conceal no illicit gambling habit, have bought no big-ticket luxury items, and have not squandered our wealth in foolhardy, get-rich-quick investments. But the steady attrition of self indulgence and inattention has landed us in the unenviable position of owing a sizeable amount of money. Frankly, we were scared when we finally added it up and took stock of how much we owed.

Sprinkler Buddies
These Boys of Summer aren’t scared …

Thanks to some of Kathy’s recent Dave Ramsey reading, and to the encouragement of many of our friends and relatives, we decided to make a few simple changes in our lives:

  1. We figured out how much our monthly bills would be (on average) and set aside money to pay them each month. These include our mortgage, utility bills (there seem to be an unending barrage of these), auto insurance and similar, predictable expenses.
  2. Kathy and I designed a budget to cover the remaining, more discretionary categories of spending, and (this is the important part) determined not to overspend in these areas. Such categories include groceries, household maintenance (light bulbs, shampoo, etc.), fuel, clothing (adult and child), homeschooling expenses, and (most precious of all) Tim and Kathy’s Individual Unaccountable Funds (money that we can spend individually without having to get our spouse’s buy-off). I spend a high proportion of my monthly allotment on gardening supplies and Slurpees (™), while Kathy prefers lattes and home decorating items. If, through inattention, we overspend in any area, Kathy and I contribute money from our personal funds to cover the overage.
  3. After hours of study and intensive economic research, we came up with a wild plan: we stopped using credit to cover our overspending. Oh, we still use a credit card for online purchases, but when we do, I fire off a check from our online banking that same day to cover the full amount of the credit card purchase. Then when the billing cycle is complete, we read those magical words: No Payment Due. Sometimes I get a little carried away paying off Chase or Bank of America, and actually end up with a small credit on my credit card statement, which stands the whole system on its ear. Imagine, actually having credit on a credit card. What’s more, if you leave a balance on the card long enough, they have to send you a check. While I don’t advocate this as a crafty investment plan, it is sort of fun to get a check from a company whose mail you used to dread.
  4. We’ve trimmed and squeezed our monthly budget so that we could make steady payments against our debt. When we get extra money (which seems to happen a lot, lately), we often do something crazy: we use it to reduce our debt. We know it is un-American, but we just can’t seem to help ourselves. As of this writing, we’ve reduced our debt to 51% of what it was, only three months ago. We owe our humble thanks for this to our Lord, Jesus Christ, who has helped us to pay this down so quickly.

As victorious as we feel, it hasn’t all been a bowl of cherries. It hurts not to be able to spend in a carefree fashion, and it takes time (mostly on Kathy’s part) to record each and every transaction, and to monitor the dwindling monthly funds in each category. Both of us have had to swallow some of our pride as we learn to live within our means.

We’re also conscious of how pathetic we must seem, to some of our friends and relatives who have faithfully stuck to a budget for decades. It is interesting to watch our children learn from our mistakes and rapidly adapt our new-found budgeting skills. I was talking with Joshua the other day about the principle of setting aside an emergency fund before saving for a discretionary purchase.

Joshua's savings
Not Joshua’s actual savings.

“How’d you decide how much you would establish as your emergency fund,” I asked him, wondering what he would consider an emergency.

“I decided to set aside the $160 I would need if there was a sudden youth group retreat that I wanted to attend,” he informed me. “That way I still could go, even if I hadn’t known in advance to save for it, or if all my other sources of income suddenly dried up.”

Rachel has been hinting about getting a cell phone for some time. I told her she could have one as soon as she could (a) buy the phone, and (b) pay me, up-front, two month’s reserve to cover the cost of her plan. Dave Ramsey talks about a ‘gazelle-like intensity’ in paying down debt – Rachel left all the gazelles milling around the starting gate in her rush to save enough money to get a phone.

“Hey,” says one gazelle to another. “What was that pink flash?”

Fortunately for Rachel, my employer (just this month!) increased the value of my cell phone perquisite so that the monthly fees for another cell line are quite reasonable.

“Here’s the money, Dad,” she informed me (rather smugly) a couple of days after I had set out the requirements. “I’ve saved up my babysitting money and I’m ready to buy a phone.” So much for that strategy to slow her down.

Rachel's New Phone
Rachel spent at least 10 hours playing with her phone before the account was even activated.

One interesting development is that our spending categories have begun to acquire personalities. Fuel, for example, is a burly, simple man who lives in the moment and doesn’t have to worry about the future. “Next month is Vehicle Maintenance’s problem,” he chuckles, confidently. Since I’ve started van-pooling to work, the end of the month holds no terror for him.

Groceries, on the other hand, is a thin, melancholy woman with low self-esteem, who wishes every month were February, (not on a leap year). “How can I possibly make it to the end of June when I’ve already spent two-thirds of my budget by the eighth day of the month?” she wails.

We talk about them as though they were people. “I don’t think Households wants to pay for that,” Kathy warns.

“How ’bout Kid’s Clothing then, he’s got lots of dough,” I fire back, while Kathy laughs maniacally. (Kid’s Clothing is a chronically under-funded waif with a starvation-swollen belly, who philosophically and somewhat apathetically takes whatever life throws his way.)

As much as it pinches to restrict my discretionary spending, it is fun to be able to spend without guilt. The other day I bought some gardening supplies out of Tim’s Unaccountable Fund, and I didn’t have to worry about justifying the expense to Kathy, or feeling bad about borrowing the money to pay for my hobby. Kathy and I also look forward to the day when we no longer must allocate 10% – 20% of our income to paying down our debt – I’m sure we can find something to do with that extra money every month — maybe we could buy some Teriyaki take-out for Kid’s Clothing.

Project 366, Day 183

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13 thoughts on “91 Days of Ramsey”

  1. Oh I am so happy for you and so proud of you. It’s a great testimony to read your journey in paying your debt and being more responsible stewards of God’s provisions. God bless you and may He continue to prosper you.

  2. This is wonderful, Tim. I’m so proud of you. You’re learning lots, being responsible stewards of God’s provisions and teaching the kids at the same time. And staying mostly cheerful about it!!

    I love you Edgrens!! We’re off for TX in a bit. Aunt Kate

  3. It doesn’t seem like it’s been 91 days since your grand adventure started! I am really impressed that you have done so well and so quickly!!! It’s painful to see how all those little side trips to Stuffmart can really put a crunch in the budget ~ not to mention take up room in your house! At least we don’t live on the top of a blueberry tree like Madam Blueberry..her trips to Stuffmart had a disastrous ending!! ha!

    We have found that God always provides money when we least expect it (and need it the most!!) Congratulations on your hard work Tim & Kathy!!!

  4. Your family totally ROCKS!

    I am glad you hopped on the TMMO bandwagon. You all have made amazing progress! It really is astounding, isn’t it? We always felt like we had “no money” but in reality, we had plenty of it but we were frittering it all away. Having started in February of this year, my goal will be to finish paying off the van by the end of September.

    I am a little worried about the next step though. Building up savings, while intrinsically rewarding, will not have the same “fun” factor. lol

    I will continue to be rooting you guys on. You’re doing beautifully.

    ps- by the way, I was laughing aloud at the image of the gazelles in the starting gate, watching your daughter whiz past. lol

  5. Go Edgrens, go Edgrens, go Edgrens….hoo hooo hoooo!

    What surprises me is that this stuff isn’t required credit in high school! How can we say a young man or woman is sufficiently educated with little to no understanding of economics and delayed gratification!?

    Good for you guys for being faithful stewards and using common sense!

  6. Congratulations!! You’re doing an awesome job. We’ve lived on a budget (thanks to Larry Burkett years ago) for 20 some years. We have recently begun a Dave Ramsey group with some friends of ours who want to get started on a budget. Since we don’t have any debt other than our house our goal is to pay it off. We only owe about 5 more years on it anyway, but we think we can cut that time in 1/2 by adjusting some of our discretionary spending… living on less than our means to go ahead and pay that debt off more quickly. It’s never been a priority for us because we also wanted to enjoy family vacations, adding more room on to our home, etc., while our kids were still here to enjoy those things… so we’ll see… but for now we’ll just start socking more $$ away and then decide how to spend it when we have another sizable amount saved up above and beyond our accounts for emergency reserve, 6-12 months living expenses, and investements, etc.

    KEEP UP THE HARD WORK! It’ll be so worth it in the end!

  7. Simply amazing!! Great job. I’m inspired to keep on myself.

    You are going to call in and scream, “I’m debt free!!” aren’t you?

  8. WOW! This is so awesome. How great to see God blessing you all SO much! Thanks for letting us watch. I really enjoy the end of the month blog now to see the difference!
    Your budgeting has inspired me to start working towards paying off those horrible student loans I’ve accumulated in the past few years! Thanks Edgrens!

  9. you guys are great! an inspiration and an encouragement who are trying to get our finances in order. we have just started to pay down our debt and i love seeing those card balances reach zero.

    i’m so glad the Lord has blessed you on this journey and your willingness to be transparant to spur the rest of us on.

  10. Thank you to all those who have encouraged us in our budgeting, and for the many who we suspect are praying for us. It is by the strength of Christ that we accomplish ANY good thing, as we recently studied in John 15.

    We are honored and delighted to serve as a small encouragement to others, as well.


  11. As one who’s dear hubby has been dragging her along kicking & screaming while we “do the Dave Ramsey method,” I have to say my hat is off to you. To get where you are in just three months is simply amazing to me! Over the last two days we have listened to Dave’s Total Money Makeover while driving home from a family vacation & running errands today. For the first time, I think I’m actually “totally focused with gazelle-like intensity” towards being debt-free. If I had been at this point two years ago, we would have almost been there. Unfortunately, I was not & made a very costly mistake that we are still paying for. ::sigh:: One baby step at a time & we will get there. Thanks for sharing your life with us on-line! I learn something each time I read. ;-)

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